The sleaze report: The end of a grubby affair

In a report that concludes one of the most shameful and grubby episodes in recent British politics, Sir Gordon Downey, the Parliamentary Commissioner for Standards, found two former Tory ministers guilty of taking envelopes stuffed with cash for asking questions in the Commons.

The long-awaited 900-page report by Sir Gordon had been ready for publication before the general election, but was delayed by John Major's decision to prorogue Parliament early. It turns out to be particularly damning about the behaviour of two former ministers, Neil Hamilton and Tim Smith, as well as being highly critical of three other ex-MPs.

Of Mr Hamilton, the former corporate affairs minister, Sir Gordon says that the evidence that he "received cash payments directly from [Mohamed] al-Fayed [the owner of Harrods] for lobbying services is compelling." Mr Smith, too, accepted cash payments from Mr Fayed of between pounds 18,000 and pounds 25,000. Sir Gordon concludes that Mr Smith's conduct "has to be seen as a disingenuous attempt at concealment".

The two former ministers reacted very differently. Mr Hamilton, unrepentant, said he was "disappointed, devastated, perplexed and amazed" at the report's findings. But Mr Smith, who resigned just before the election as Tory candidate for Beaconsfield, said: "I am very sorry that my conduct fell well below the standards expected of MPs. I can only say in my defence that it seemed less obvious at the time than it does with the benefit of hindsight what was the right course of action to take."

Martin Bell, the independent MP who defeated Mr Hamilton in the safe Tory constituency of Tatton, said the report vindicated his decision to stand in the seat. The BBC also confirmed last night that Mr Hamilton was still asking for cash for questions by demanding pounds 50 to do interviews.

Mr Hamilton vowed to continue fighting and said that he would go to the courts "if he could find the money" to clear his name. Alan Barnes, the constituency chairman in Tatton, last night announced his resignation.

William Hague, the Tory leader, failed to distance himself from those criticised in the report, saying: "The individuals concerned will wish to consider how they respond to Sir Gordon Downey's serious findings. The Conservative Party wishes to see such matters fairly and rigorously dealt with."

Some Tory backbenchers were aghast at the feeble response from Mr Hague. One told The Independent: "William should express strong views about how to deal with the rogues and liars. We lost the election because people didn't believe us, and he has to take a stand, but he is in danger of making the same mistake as Major. This was a significant sample of Tory MPs in the last Parliament."

Labour sources moved quickly to make political capital out of Mr Hague's stance, contrasting his failure to act with Labour's quick distancing from its two MPs facing disciplinary charges, Mohammed Sarwar and Bob Wareing: "This is a big test for Hague; he should ensure these people are booted out of the party," one source said.

The Liberal Democrat Charles Kennedy, a member of the House of Commons Standards and Privileges Committee, said: "The sad truth is that on the part of a number of MPs there has been disingenuous and dishonest behaviour."

The strongly worded nature of the report vindicates the Guardian, which leaked parts of it before the election in clear contravention of parliamentary procedure. Alan Rusbridger, the editor of the Guardian, said last night that the paper's publication of extracts prevented the election of several of those involved in the affair.

The report was critical of four other former Tory MPs who faced allegations of misconduct. Sir Michael Grylls, who retired from his Surrey South West seat, was found by Sir Gordon to have received undisclosed payments of cash from Ian Greer, the lobbyist. He was also found to have "misled a select committee of MPs" and "persistently failed to declare his interests in dealings with ministers".

Sir Andrew Bowden, who lost Brighton Kemptown in May, "failed to declare interests in dealings with ministers and officials over the House of Fraser", and in one case "gave a misleading explanation" for his lobbying. He also failed to register a donation to his election campaign.

Michael Brown, who lost Cleethorpes, "persistently and deliberately" failed to declare his lobbying interest for a tobacco firm when dealing with ministers and officials.

Sir Peter Hordern, who stood down at Horsham, was only mildly rebuked for having broken the spirit of the rules but was cleared of accepting cash for questions. Four other ex-MPs who received money from Mr Fayed were exonerated: Norman Lamont, Lady Olga Maitland, Gerry Malone, and Nirj Deva. Sir Gordon also said that the rules governing the registration of election donations should be reviewed.

The former MPs have two weeks in which to challenge the findings of the report and then it will be up to the 11 members of the Commons Standards and Privileges Committee to decide what action to take. As the men concerned are all now out of Parliament, possible sanctions are limited but the committee could theoretically recommend to Parliament that they send them to prison or ban them from standing for election. However, one source close to the committee said: "They will never get back into public life. That is sufficient punishment."

Below standard, pages 4,5

Leading article, page 19